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China’s central government listed “boosting consumption…and stimulating domestic demand” as its first “major task” for 2025, at the recently closed “two sessions”.
As part of this focus – and amid slowing economic growth – the State Council made specific mention of China’s “two new” (两新) policy.
The policy was first announced in 2023, but was heavily promoted last year. President Xi Jinping reportedly “stressed the importance” of a national recycling company as part of the policy in 2024, because it “facilitates green, low-carbon and circular development”.
Carbon Brief explains what the policy is, how it works and what its impact will be. An abridged version of the article appeared in China Briefing on 20 March.
What is ‘two new’?
The “two new” policy is short for “large-scale equipment upgrades and trade-in of consumer goods”. It is designed to boost domestic demand to prop up growth, at the same time as improving the efficiency of equipment so as to lower emissions.
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According to the Communist party’s leading magazine on ideology Qiushi, the idea was first raised in 2023 at an economic conference held by the State Council for “improving technology, energy consumption, emissions and other standards”.
It became well-known after Xi reiterated the idea in early 2024. In March 2024, the policy then became an “action plan – a document illustrating specific methods for executing a political goal.
Prof Bai Quan, director of energy transition at the Academy of Macroeconomic Research – a research institution under the direct supervision of the State Council – told Carbon Brief in 2024 that there are four aspects of “two new”:
- Updates to equipment such as large boilers, turbines, heat pumps and lighting used for manufacturing;
- Trade-in of consumer goods, including fridges and air conditioners;
- Recycling of old or high-emission items;
- Improving standards for product efficiency and emissions, as well as for recycling, “to prevent people from re-purchasing outdated equipment with low energy efficiency”.
He added that the first three aspects directly “promote carbon reduction” and the last one “indirectly serves energy saving and carbon reduction goals”.
Under the policy, government subsidies are provided for manufacturers and consumers to trade-in old inefficient goods and purchase new ones. Other financial and tax support is given to recyclers to increase recycling.
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In 2025, the State Council updated the “two new” policy and increased the funds available to consumers and businesses.
It also expanded the range of trade-in products, adding more and older petrol cars for instance, as well as pledging to release a more detailed trade-in standard covering 294 items by the end of the year.
Li Gang, an official from the Ministry of Commerce, is quoted by the state news agency Xinhua saying at the press conference on the expansion that it would “help stimulate consumer spending and boost domestic demand. All enterprises, domestic or foreign-funded, private or state-owned, are welcome to participate in the scheme.”
How does equipment upgrade work?
A fundamental mechanism of “two new” is providing funding that enables consumers and businesses to trade-in and upgrade goods, as well as recycling the old equipment.
For example, under the policy, a consumer can trade in an old, inefficient petrol car and receive subsidies to upgrade to a new electric vehicle (EV) instead.
The government “work report” delivered by premier Li Qiang at the “two sessions” says that “ultra-long special treasury bonds totaling 300bn yuan ($41bn) will be issued to support consumer goods trade-in programmes” in 2025.
Meanwhile, another 700bn yuan ($96bn) will be allocated for a sister programme, known as “two major [projects]” (两重), which supports infrastructure construction, including roads and railways.
In a more detailed “two new” paper, the State Council says it will provide about 90% of the funds and the rest shall be covered by local governments.
A sum of cash will be given when old “high-emission” goods, such as ships, trucks, tractors and buses, are sent for recycling, depending on the age and emission levels. Some discounts will also be given when purchasing new lower-emission replacements.
Separately, companies can apply for a low-interest loan for large-scale equipment upgrades.
The State Council paper also eases the rules around low-interest loans for equipment upgrades, making it easier for small and medium-sized enterprises to access them.
According to the paper, projects that can apply funds from the cash pool include “equipment renewal in the field, as well as energy conservation, carbon reduction and safety transformation in key industries”, such as transports and agriculture.
The policy also allocates around 7.5bn yuan ($1bn) for the “recycling and treatment of waste electrical and electronic products”. This extends beyond the list of trade-in items.
How does ‘two new’ support recycling?
As the world’s largest renewable energy producer, China has so far built some 1,408 gigawatts (GW) of wind and solar capacity. About 35m tonnes of waste from decommissioned wind and solar equipment will need to be recycled in China by 2030.
A research paper in the journal Waste Management suggests building up sufficient capacity to recycle this waste could generate “significant economic benefits”.
However, Shanghai-based outlet the Paper reports that only a limited number of recyclers are on the market, due to the high costs and long payback periods.
Despite Beijing issuing policies in 2023 and 2024 to encourage businesses, a stronger recycling market is needed for “advancing” the “two new”, according to prof Du Huanzheng, director of the Circular Economy Research Institute of Tongji University.
In 2024, a state-owned recycling company, China Resources Recycling Group, was established to handle scrap steel, EV batteries and decommissioned renewable energy equipment.
But “challenge[s]” remain for private recyclers, Bai told Carbon Brief. One obstacle is missing a “first receipt”, which is the purchase receipt from manufacturers that enables recyclers to claim value-added tax deductions, he said.
A supporting policy for the “two new” from 2024 allows qualified recyclers to use their purchasing invoice in place of “first receipt” for tax claims.
Bai said this policy “solved the problem” and “is a very important incentive to meet the 2027 goals” of the “two new” policy.
The 2027 goals, written by the State Council, include a 25% increase in new equipment investment across key sectors and a doubling in the share of cars being recycled:
“By 2027, the scale of equipment investment in industries such as industry, agriculture, construction, transportation…will increase by more than 25% compared with 2023; the energy efficiency of major energy-consuming equipment in key industries will basically reach the energy-saving level, and the proportion of production capacity with environmental protection performance reaching Class A will be greatly increased…The amount of scrapped cars recycled will increase by about one-fold compared with 2023.”
How does trade-in work under ‘two new’?
Li Shuo, director of China Climate Hub at the Asia Society Policy Institute (ASPI), tells Carbon Brief that this is not the first time China used subsidies and “similar initiatives” to “stimulate consumption, address product oversupply and enhance energy efficiency”.
In 2025, the categories of eligible trade-in goods under “two new” is expanding from eight to 12, including mobile phones and fridges that are closely related to daily usage. Up to 500 yuan ($70) subsidies apiece can be applied when purchasing new digital products from 2025.
Electric vehicles (EVs), which can greatly decarbonise road transport, remain on the list. In addition, scrappage subsidies have been extended to more and newer types of petrol cars – including cars registered from 2012-14 rather than 2011-2013.
Li adds that the latest expansion of the policy “highlights the rapid pace of industrial upgrades in China and the mutually reinforcing dynamics of industrial productivity, a favorable regulatory framework, and the sheer scale of the Chinese market”.
Bloomberg says that “the cash-for-clunkers program gave a big boost to sales – especially of EVs and hybrids – after its introduction last year” and “manufacturers and investors had been eagerly waiting to see whether the subsidy” would be renewed in 2025.
The buyer rebates for vehicles, including EVs and more efficient petrol cars, remain at the same level as in the second half of 2024, after a rise last August.
Buyers can receive up to 20,000 yuan ($2,730) for EVs and plug-in hybrids or 15,000 yuan ($2,073) for petrol cars with an engine smaller than two litres.
(The Chinese EV industry receives a complicated range of subsidies, read more in Carbon Brief’s Q&A on the sector.)
What is the impact?
Xinhua says that the trade-in scheme boosted sales of cars in 2024, with new energy vehicles (NEVs, mainly EVs and plug-in hybrids) accounting for more than 60% of the new vehicles bought under the initiative in 2024.
Meanwhile, products certified with the “highest energy-efficiency level” made up more than 90% of sales by revenue under the home appliance trade-in scheme, adds the report.
An analysis by Goldman Sachs says the trade-in subsidies have “accelerated” the rising share of NEVs in Chinese car sales. It says the policy will help raise the NEV share from 48% in 2024 to about 60% in 2025.
Subsidies for NEVs under “two new” have amounted to 90bn yuan ($12bn), accounting for about 60% of the total “trade-in money”, according to Goldman Sachs.
In his 2024 analysis for Carbon Brief, Lauri Myllyvirta, lead analyst at the Centre lead analyst at the Centre for Research on Energy and Clean Air (CREA), wrote that the trade-in subsidy scheme would “free up household cash for other types of spending, but it also directs household spending in the most energy-intensive direction”.
He tells Carbon Brief that the policy, after the 2025 expansion, is still a “much more limited measure than the kinds of income transfers that would be needed to substantially boost the role of household consumption in driving economic growth”. He adds:
“[It] targets the most energy-intensive part of household spending, purchases of energy-intensive manufactured goods, while leaving out spending on services and other less energy intensive sectors.”
Lynn Song, chief economist for Greater China from market research firm ING, tells Carbon Brief that it is “hard to quantify [the impact of ‘two new’] until we have more specifics rolled out such as what level of subsidies will be applied”. He says:
“The 300bn budget for the programme sounds a little small at first thought – under 1% of total retail sales last year – but it will boost sales beyond the 300bn [yuan] spent, so it should result in a fairly significant bump in my view.
“Looking at last year’s performance once the policies started ramping up in the second half of the year, we saw autos and home appliances easily outperform the headline retail sales growth.”
Song adds that the trade-in subsidies under “two new” can “lead to improved demand for these categories this year”.
In his 2024 interview with Carbon Brief, Bai called the “two new” a “sign” of the government using policy support to stimulate lower-carbon consumption. He added:
“Another vital policy is the ‘guidelines to ramp up green transition of economic, social development’… It is a blueprint of China’s transition in industry, building [construction], transportation, energy and many other areas. Together with the ‘two new’, which is an implementation document for this top-level design, we now have both a direction and a manual for the energy transition.”
The guideline aims to “achieve ‘remarkable results’ in the green transition” by 2030 and establish a “green, low-carbon and circular development economic system” by 2035.
(Read more about the guideline in China Briefing.)
An official release says that the “two new” policy “saved about 28m tonnes of standard coal and reduced carbon dioxide [CO2] emissions by about 73m tonnes” in 2024. It says the “effect” of supporting the low-carbon transition was “obvious”.
The post Q&A: How China’s ‘two new’ policy aims to help cut emissions appeared first on Carbon Brief.
Q&A: How China’s ‘two new’ policy aims to help cut emissions
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An older teaching about land acknowledgement
As I have come to understand the spirit and intention of land acknowledgement, I often return to fond memories of my grandmother and her words of wisdom. She taught that the health of the places we call home comes first, because the wellbeing of the people depends on it.
In her teaching, land acknowledgement began with the land. Long before it became a paragraph read at the start of a meeting, it was a way of recognizing a homeland: its waters, its species, its seasons, and the spirit that revealed whether the place was well.
Her teaching echoes a practice found across many Indigenous Nations. Haudenosaunee gatherings, for example, have long opened with the Ohén:ton Karihwatéhkwen, the Thanksgiving Address, often translated as “the words that come before all else.” The speaker greets and gives thanks to the people, the earth, the waters, the plants, the animals, the winds, the sun, the moon and the stars. Only after everything that sustains life has been acknowledged does the gathering turn to its own business.
That order changes what an acknowledgement is for. Its purpose was to share the story of a place with neighbours and to draw them into the work of tending it. People entered the story second, as the ones responsible for what had just been named.
Understood this way, an acknowledgement does more than open a meeting. It asks us to reconsider where we stand, and what we owe the ground beneath us.
Nations among nations
In her teaching, people are one nation among many. The salmon are a nation. So are the cedars, the bison, the medicine plants, and the pollinators. Each belongs to a place, carries its own responsibilities, and offers gifts no other nation can give.
This idea of kinship runs through many Indigenous philosophies. The phrase “all my relations,” heard in ceremonies and gatherings across Turtle Island, is a reminder that family extends beyond people to the animals, plants, waters and lands that make life possible. Some Indigenous languages carry the same understanding in their grammar, speaking of many plants, animals and natural forces as living beings rather than objects.
Sovereignty, understood through this relationship, is a kind of standing more than a form of control. Each nation belongs fully to its place and carries its share of that place’s life. No nation thrives alone, and none thrives by taking over the whole.
The land is also the source of instruction. Over generations, people watched how a river valley or a stretch of prairie kept itself well: who arrived when, who fed whom, and how much could be taken before the giving stopped. In my grandmother’s telling, those observations became instructions, and those instructions helped shape law and protocol. They guided when to harvest, where to camp, how to enter a neighbour’s territory, and what was owed in return.
Indigenous legal scholars today often describe this as law that comes from the land itself, learned by watching how living systems sustain one another. A plainer name for it is knowing how to live somewhere.
The host and the guest
One of the clearest teachings in this understanding of the world is the relationship between host and guest. My grandmother invited us to recognize that relationship in the lives of plants and animals.
A host prepares the place before anyone arrives. A beaver family dams a stream, and the pond becomes a home for fish, frogs, birds and plants. A fallen tree becomes a nurse log, feeding the next generation of seedlings as it returns to the soil.
A host offers first. A flowering plant sets out nectar. A berry bush ripens fruit. These provisions come in their own season, not whenever a visitor happens to want them.
A host also makes its presence known. Birdsong, scent and the marks left along a trail tell newcomers that a place is already inhabited. The visitor does not arrive in an empty world.
The guest has responsibilities too. A guest attends to the season and to what the place can offer. A guest does not assume that everything within reach is theirs to take. A guest leaves something that helps sustain the relationship.
A bee takes nectar and carries pollen. Read through this teaching, that exchange offers an image of visiting well: receiving a gift while helping the host continue its life.
Many Indigenous harvesting protocols carry the same ethic into daily practice: ask before taking, take only what is needed, offer thanks, and leave enough for others and for the plant or animal to recover.
None of this suggests that every relationship in nature is peaceful or generous. These are ways of seeing responsibilities that people can learn to carry.
Everyone is both
No being is only a host or only a guest.
A tree makes room for other life while depending on soil, water, sunlight, fungi, and relationships beyond itself. People, too, may welcome others into their homes while remaining dependent on the larger homeland that sustains them.
The distinction between host and guest is therefore about roles, not ranks. Everyone receives. Everyone has something to give.
The question is whether the exchange sustains the place.
A visitor who takes without restraint leaves less for those who come next. A host who neglects the place has less to offer. Both have responsibilities, and neither can fulfil them alone.
This is the heart of reciprocity, a principle found across Indigenous philosophies: relationships stay healthy when gifts move in both directions. The Haudenosaunee teaching of the seventh generation extends that exchange across time, asking that decisions made today leave the place well for those not yet born.
Mutual benefit begins here, with the recognition that different beings carry different gifts and obligations.
What people carry forward
My grandmother’s teaching connects these relationships to the ways people meet their neighbours.
The host prepares a place, offers food and rest, and explains where the visitor has arrived. The guest makes themselves known, explains why they have come, listens to the terms of the visit, and brings something in return. The gift may be material. It may also be labour, knowledge, news, or a commitment to help.
Nations around the Great Lakes carried this ethic into treaty. The Dish with One Spoon, an agreement among the Haudenosaunee, Anishinaabe and allied Nations, describes shared hunting grounds as a single dish. Everyone eats from it with one spoon, takes only what they need, leaves enough for others, and keeps the dish clean. The Two Row Wampum, between the Haudenosaunee and European newcomers, shows two vessels travelling side by side on the same river, each keeping its own ways and neither steering the other.
In this understanding, acknowledgement is more than naming the people associated with a territory. It is learning enough about a homeland to behave responsibly within it.
Whose home is this? What sustains it? What laws and agreements guide our presence? What can we receive, and what must we return?
These questions make acknowledgement a relationship rather than a recital.
They also make it diplomatic. A guest who recognizes the host’s homeland recognizes that they have entered a place with its own relationships and responsibilities. A host who welcomes the guest makes room for an encounter governed by those relationships.
Neither arrives without standing. Neither arrives without obligations.
Beginning with place
I write from the shores of the Bay of Quinte. Here, the teaching asks me to begin with the water, the shoreline, and the life they sustain. Before I describe myself, I must attend to where I am.
That does not make people or history less important. It places them within the homeland that gives them meaning. The people, their laws, their agreements, and their responsibilities all belong to the place.
In a time of longer fire seasons, troubled waters, and uncertainty about what the next season will bring, this teaching asks something difficult and useful of us: pay attention before you speak.
An acknowledgement cannot tell the story of a place if the speaker has stopped noticing it.
The land came first. Beginning there again means learning to name what sustains us, and accepting that what sustains us also asks something of us.
By Rye Karonhiowanen Barberstock
Photo by Andrik Langfield on Unsplash
The post The Land Came First appeared first on Indigenous Climate Hub.
Carbon dioxide (CO2) emissions from fossil fuels and cement are projected to fall by around 0.4% in 2026 to 38.2bn tonnes of CO2 (GtCO2), according to new figures from the Global Carbon Project.
This guest post is by:
- Dr Zeke Hausfather, Carbon Brief’s climate science contributor
- Prof Pierre Friedlingstein, chair of mathematical modelling of climate systems at the University of Exeter